my take on money in kenya

Category: business

The Kenyan economy is somehow cursed. This is in reference to the various monopolies we have in the country.

Examples include, Kenya Power, KenGen, Bata and though Safaricom may not be a monopoly, it does use its dominant position to force onto consumers charges that are absurd and excessive and of a greedy nature.

The real monopoly game.

Although the real monopoly game is a very useful tool in instilling financial education especially in our children, the Kenyan monopoly game is an oppressive exercise that involves the hiking of prices so as to gain abnormal profits just because you are the only one that has that the commodity in the region.

Granted, for example, if I was the only person in Kenya selling chicken, i’d probably sell them at 5,000 shillings each and still be able to sleep at night. But chicken is not an essential living need.

Electricity is an essential need in every household in Kenya, and yet Kenya Power are actually selling it more expensively to those who consume less of the power. Its a step further than oppression, the act of oppressing those already oppressed by their financial inabilities.

It is not a problem that a common mwananchi can resolve. Unless you have a couple of billions of dollars to start your own electricity distribution company, the only hope we have is in the ministries of energy and trade and regulation commissions to lobby for us as citizens and to act as a watchdog against these greedy monopolistic companies.

Then again, most of the times the watchdogs are just given a few bones and small pieces of meat to keep them distracted and alas they forget all about us. Leadership for the leaders and not for the people. Sad.

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The ineffectiveness I am referring to is in relation to wealth creation.

Many of our Kenyan graduates and youth at large regard employment as their objective in life. They believe that when they get that white collar or blue collar job, their struggles are over and they will live a fulfilling life.

To some degree, this is indeed a reality. Yes, you will live in that 3 bedroom house, but you will be renting it or paying mortgage for it for most of your employed life. Yes, you will get that car, but you will be, for a couple of years, financing it with almost half of your monthly paycheck.

What I am trying to explain here is that formal jobs are not adequate and are therefore not effective in creating real tangible wealth to the tunes of hundreds of millions to billions and beyond. This is where the informal sector comes in.

The informal sector in Kenya is the ultimate and most awesome place for a common mwananchi to start building his or her empire. From the matatu business, to furniture making, to hardware stores, to jua cali metal creations, the list in endless.

The informal sector is where you can start a hardware store and in a year or two, you will be able to open up two to three more hardware stores. It is a beautiful place that has often been overlooked by people.

We have to be able to embrace this sector instead of sitting in a desk for a whole 30 days and taking home 50,000 shillings and yet many individuals in the informal sector are making that same amount in a day, in net profits.

If you want to create an empire, more specifically in a developing country like ours, start in the informal sector.

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HELP YOURSELVES! And yes, the Capital letters mean I am angrily shouting at you right now.

Focus on You.

We as a nation have been, for years, taken for a ride by politicians as they, since independence, have been strategically blinding us with political storms and propaganda to capture our attention and only focus on them and not our own individual growth.

And the media has been very effective in propagating this menace.

Why have we been duped so easily? That every time something goes wrong we have to ask the government to do this, oh government do that. We have to wake up! In the fundamental philosophy of a democracy, we as the citizens of this country are the government. What are we doing then asking the government for this and for that and for every other resource that we as a people have mandate upon?

I want to pose a test for us. This is a test that i want every Kenyan to take on. This is not an election year, there are no significant elections to be held. So do this.

At the very mention of politics, i just want you to block it out or change the subject. Block all political news, propaganda, or talks and focus entirely on family and finance. Specifically your family and your finance.

Accept this test and do it and I assure you 110% that your life and that of your family will have experienced significant change in the way you live and the position of financial stability in your home will definitely improve.

Just block the politics out. Its not that hard now is it? We have to realise that we do not have time for petty political talks that end up culminating into nothingness! It is a waste of precious time for us as a nation. Time that could have been used to develop businesses, to develop trade relations, to develop family finance values.

Let them talk to themselves. We pay them millions of shillings to talk politics. That is their job. Let them not drag us into it. We have no time or patience for political rallies and their campaigning all the time. Let them wait for the election period. Let them leave us in peace so that we can work and be able to fend for ourselves and improve our livelihoods too.

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Family money is who’s money? The father, the mother, the children? Who controls the assets?

In Kenya, it’s common that the one who brings in the bread is the head. Be it the man,woman or child. But then there is a problem. When the one who brings in the money suddenly becomes unavailable, everything turns to a stand still.

And therein lies the problem. There is no empowerment of family members to bring in their own money. The best community in Kenya that has developed firm empowerment of mainly the children is the Hindu community.

A good example is Chandaria Industries whereby the father made his son the Director of Chandaria who is only in his early 30’s. Granted it was to give way for his father’s work in charity but it is still empowerment that ensures prosperity of the family and the empire that was primarily built by the parents.

This type of family empowerment is fairly absent in the African community. We always hear cases of a prominent businessman who has passed on and suddenly people show up from every nook and cranny claiming relationship with the deceased mogul and wanting a piece of his or her empire.

This causes lack of continuity. The empire withers and dies due to lack of empowerment. This state is mainly propagated by the empire creator who always sees himself or herself as one of kind and no one can fill his shoes.

So he or she makes no effort to create a clear lineage for which to follow once he’s gone. Its like they think they are immortal and will forever live to control their estates. But father time always catches up with them. And when they are no more, their legacy goes with them.

We need to ensure empowerment in our families and create proper lineage. Otherwise all that we create will only live as we live. Only last our age of death. And go to the dirt as we go to the dirt.

Its a sad state of our current Kenyan economy, one that we need to change, for the good of tomorrow and hundreds of years from now.

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New day, new articles. I’ll do my very best to write two articles daily for the blog. They are more like personal rumblings than they are articles, but you get the point.

Potential investors in Kenya always ask, ‘do you have a reference?’ has your product or service produced any revenue?’ and so on and so on.

Almost none of them have the guts to look beyond the numbers and focus on the vision that brought the new product to life. Was there need for the product in the market? Or will there be need in the future for the product or the service? These are the questions they should focus on.

To be fair though, Return On Investment (ROI) is regarded highly as a motivator to invest in a start up.

But it is not the only factor that matters. In Kenya though, they focus almost entirely on the ROI.

Our investors need to be revolutionary. Think outside the box. New products or services barely have any revenue. But are they viable in the current or near future market?

A good example of revolutionary investment was the creation of mobile money transfer by Safaricom. Mpesa was a first of its kind in the world. The Safaricom board took on the risk and look at their revenues now. Granted they have over the past year or 2 made their charges quite expensive, but it all started with an investor who looked beyond the current status of the idea (it had no revenue, no reference, no example of it in the market), and saw the vision and potential of it and decided to invest.

So these cowardly investors need to step up and look beyond the current status of an idea or a product. They should begin to accept more revolutionary and new and bold ideas that have abundant potential. They should not just accept real estate or car dealers or supermarket chains just because they have been proved to be worthwhile.

They should be brave and bold and be ready to invest in new ideas, new products, new services and thus create revolutionary businesses that will broaden our economy and increase our revenue streams as a country.